ZACHARY DUGGER,
3160 Fruitland Drive,
Vista, CA 92084.
Telephone: 760-458-6131.
April 16, 2021.
HON. MITCHELL L. BECKLOFF,
Dept. 86, Stanley Mosk Courthouse,
111 North Hill Street.
Los Angeles, CA 90012.
RE: CASE NO. 19STCP04926.
Respectfully,
This letter raises my quick response over the mentioned case. The case involves a writ of administrative mandamus against me and my Co-Defendants/Respondents.
FACTUAL BACKGROUND
As already stated, I am one of the Respondents/Defendants in the above captioned case. I am a shareholder and Director of The Run Travel, Inc., A Nevada corporation. See Exhibit 1: My Declaration. The Petitioner, Steve Goldfield, and I are part of the three Founders of the corporation. Up until April 16, 2018, Petitioner was an Officer and Director of the corporation. On or about the said date, all the shareholders except Petitioner voted to remove Petitioner from the Director’s Office. Accordingly, my wife, Respondent Kelly Dugger, and I were voted in as Directors with me as President. Exhibit 1.
When Petitioner was President of the corporation, he had access to, and controlled the books are records of the corporation. In a separate action, Petitioner filed a suit against me claiming inter alia, access to books and records of the corporation. In that regard, Petitioner sent me a Discovery request containing a request for production of documents, which request I duly honored and submitted and/or produced all documents so requested, which was within my control. It is worth noting that I did not have access to any document that predated my appointment as President thereof. Accordingly, Petitioner should be in a better position to know the whereabouts of the requested documents.
Consequently, Petitioner filed the instant action before your honorable Court. In that regard, they submitted a Petition for Writ of Mandate to that effect, which Petition this letter serves as a response to.
RESPONSE AND ARGUMENT(S)
California law clearly provides the rights of minority shareholders to access and inspect Company records. Corp. Code § 1601 (a) states in that regard that:
accounting books and records and minutes of proceedings of the shareholders and the board and committees of the board of any domestic corporation shall be open to inspection upon the written demand on the corporation of any shareholder at any reasonable time during usual business hours, for a purpose reasonably related to such holder’s interest as a shareholder. This right of inspection also extends to the records of each subsidiary of a corporation. (Emphasis added).
Corp. Code § 1601(b) proceeds to state further that: “the request may be made in person or by agent or by attorney, and the right of inspection includes the right to copy. In addition, the right of the shareholders to inspect the corporate records may not be limited by the articles or bylaws of the corporation.” The same provisions apply to Financial Statements of the corporation. See Corp. Code § 114. See also, Nev. Rev. Stat. Ann. § 78.257 et seq.
Accordingly, Petitioner made several requests for production of specific documents to me. See Exhibit 2: Petitioner’s Petition, pp. 6-7, 17-18. I duly provided all documents requested by the Petitioner, which I had access to. I have even offered to give any further information that the Petitioner may want. In that regard, I find the Petitioner in maintaining this suit before your honorable court. I consider Petitioner’s action a waste of this honorable Court’s time, attention, and resources, which could be expended on hearing other matters.
Petitioner appears to be a frivolous litigant. The California Code also defines ‘frivolous’ to mean “totally and completely without merit or for the sole purpose of harassing an opposing party.” California Code of Civil Procedure § 128.5(b)(2). See also, Nev. Rev. Stat. § 18.010(2)(b). I see no reason for Petitioner to maintain the instant action against me after me having provided him the requested documents and giving him chance to request any further information. Therefore, Petitioner’s instant case meets the threshold of a frivolous case.
A court may impose sanctions for filing a complaint if the court concludes the complaint was filed for an improper purpose or was without merit, either legally or factually. Peake v. Underwood (2014) 227 Cal.App.4th 428, 440. According to California Code of Civil Procedure § 128.5(a), this honorable Court can order the Petitioner to pay the reasonable expenses for a case brought in bad faith. The provision states in pertinent part that: “A trial court may order a party, the party’s attorney, or both, to pay the reasonable expenses … incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.” Id.
“A court has broad discretion to impose sanctions if the moving party satisfies the elements of the sanctions statute.” Peake v. Underwood, supra 227 Cal.App.4th at 441. In addition to ordering the plaintiff to reimburse all of defendants’ reasonable attorneys’ fees, Section 128.7 authorizes a court to dismiss an action with prejudice as a sanction for violation of the statute. See Averill v. Superior Court (1996) 42 Cal.App.4th 1170, 1176 n.2 [“We note that under these circumstances Section 128.7 might provide an alternative basis for dismissing this suit.”]
CONCLUSION AND PRAYER
In light of the foregoing, Petitioner’s case appears frivolous, unreasonable, and groundless to me. Accordingly, I pray with much humility that this honorable Court grants an order dismissing Petitioner’s case for filing a frivolous action and order them to pay my litigation costs.
Thank you for your attention,
Yours Faithfully,
Signature
_________________
ZACHARY DUGGER
CC To:
CURD, GALINDO & SMITH, L.L.P.
JOSEPH D. CURD, SBN 115764
301 East Ocean Boulevard, Suite 1700
Long Beach, CA 90802
Telephone: (562) 624-1177
Facsimile: (562) 624-1178
Attorneys for Petitioner
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